Prince Edward Island - Low Income Tax Reduction

What’s in this article?

 

What is this?

The Prince Edward Island low-income tax reduction is a non-refundable tax credit for low income individuals and families which helps to reduce provincial tax payable. You may be eligible to apply for this credit if your net income or your family’s net income falls below a certain threshold.

The tax reduction is calculated and claimed on the Prince Edward Island PE428 form. If you have a spouse or common-law partner at the end of the year, you have to decide who is going to make the claim. Any unused amount can be transferred to the other spouse or common-law partner.

You cannot claim this tax reduction credit if on December 31st you were confined to a prison or similar institution and were there for a total of more than 6 months during the year.

 

Am I eligible?

You are eligible to claim the low-income tax reduction if you are a resident of Prince Edward Island on December 31st and you meet any of the following conditions:

  • You are 19 years of age or older;
  • You had a spouse or common-law partner; or
  • You were a parent

                   

Where do I claim this?

If you indicated that your marital status was single, widowed, divorced, or separated, H&R Block’s tax software will automatically apply this credit to your return. If however you indicated that you have a spouse or common-law partner, you will have to choose which of you will be claiming the credit. To do this:

1. Click the WRAP-UP tab.
2. Click the OPTIMIZATION icon. You will find yourself here:


3. Under the Credits that can only be applied by one person heading, click the name of the person that will be claiming the credit.

 

Where can I learn more?